While the electricity distribution companies are in government custody, they are robbing the consumers by selling the most expensive electricity, but when they are privatized, it will only bring some money to the government exchequer temporarily.
After this no one including the Federal Minister of Energy has any guarantee that these distribution companies will not loot like the independent power generation companies and the people will not be forced to purchase expensive electricity from these companies under the agreement. On the other hand no such guidelines have come out from the government that these companies will not be sold to the politicians or the close relatives of the rulers, which will later hinder any political government from revising the wrong decision.
According to the news published in the media the Ministry of Power Division has issued a notification for the privatization of electricity distribution companies across the country. In the announcement issued by the Power Division, it has been said that the plan for the privatization of 13 companies has been issued. In the notification, instructions have also been issued regarding the privatization of 12 organizations of the power sector, the privatization of electricity distribution companies will be phased.
In the second phase, other companies including Mapco and Pesco will be privatized. Sources of the Ministry of Energy say that all the power sector institutions are being privatized. The directors were appointed who will now privatize these companies which will certainly bring money to the exchequer but is unlikely to benefit the public as the companies will receive their invested capital from the consumer’s. The reason is that it is the basic principle of any business that no investor trades at a loss and tries to earn double the invested capital.
In such an environment when electricity is only not producing in the country but it is also very expensive, if someone buys an electricity distribution company, they will sell it more expensively to the consumers.
If seen the government has taken this decision to support the country’s economy but perhaps they did not feel the need to think about it when the public will come under the double-edged swords of IPPs and private electricity distribution companies then What will happen to them?
One justification for privatizing these companies is that line losses will be reduced because private owners will be able to prevent theft, although there is no guarantee it will work. Actually this is an experiment whose results no one knows. This may be good for short-term benefit of the experiment but it is likely to be a loss-making deal for inflation-affected citizens as they will already be buying expensive electricity and a unit of electricity will cost them Rs 43 to 70 and when these distribution companies would privatized then surely there will be further increase in various surcharges which will be directly borne by the public, for which the government has not presented any plan as to how the people will benefit from this process of privatization.
Also ironically, the government is still busy taking shortcuts and has not come up with any plan to phase out costly IPPs or upgrade the country’s electricity distribution system. In this way there is enough water in our country through which we can meet all our electricity needs but so far the federal government has not started discussions to build new projects like Tarbela and Mangla on its own account.
The government closed her eyes and placed all his hopes on foreign aid, which will never be fulfilled because no country including China gives aid for free but they have their own interests behind it.
Therefore, it is necessary that the Federal Minister of Energy should not just sell his companies, because even a child can sell old household goods but he should present new and viable projects to the public. It is necessary so that the country can be taken out of this crisis in the future.
